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South African Barloworld Limited and BayWa AG (Germany) are to establish a new joint venture (JV) to further their agriculture and materials handling operations in southern Africa.

Subject to approval by competition authorities, the JV – BHBW Holdings (Pty) Ltd – is to commence operations in early 2017. Barloworld South Africa and BayWa will each have a 50% stake in BHBW.

“This JV offers us the opportunity to further expand in a growth region of main strategic importance for global agriculture,” said Klaus Josef Lutz, CEO, BayWa AG. “We are pleased to do this with our local based partner Barloworld to address the long-term demand within this region for increased productivity and economic strength of its agricultural sector.”

Clive Thomson, CEO, Barloworld Limited, said “We see good opportunities for agriculture and materials handling in southern Africa and look forward to working with BayWa to combine the core competencies of both companies to build a bigger and more successful business while also creating jobs and improving food security in the region.”

BHBW will have distribution rights for AGCO brands Massey Ferguson and Challenger in agriculture, and Hyster-Yale brands Hyster and UTILEV on the materials handling equipment side. Management, staff and infrastructure remain in place, as does the existing Barloworld Agriculture dealer network.

This is the second JV between Barloworld and BayWa: In 2015, the two companies established a similar 50/50 partnership in Zambia. Strong synergies and a shared vision for supporting food production in sub-Saharan Africa have now resulted in a strengthening of the relationship.

BHBW will build on the expertise of the joint JV to grow its offering to the agriculture value chain, with a view to provide a full line of integrated solutions that will aid farmers’ productivity, sustainability and profitability.

Additional products and solutions around mechanisation equipment, digital farming and agronomy are set to be introduced over the course of the first 12 months of operation.